- Litecoin price has broken down out of the bear flag formation identified last week, suggesting the start of a downtrend.
- Although theoretical forecasting methods hint at a 64% nosedive, investors can expect stabilization after a 20% crash.
- If LTC produces a daily candlestick close above $64.43, it will invalidate the bearish thesis.
Litecoin price action over the last few weeks paints a bearish picture, as discussed in our previous article. Since then, LTC has triggered a breakout and is likely to continue heading lower.
Litecoin price and potential plays
Litecoin price created a bear flag setup, which is a bearish continuation pattern. This technical formation contains a massive sell-off that looks like a flagpole and is often followed by a tight consolidation that resembles a flag.
In the case of Litecoin the setup forecasts a 64% downswing in LTC price to $19.74, determined by adding the height of the flagpole to the breakout point at $55.03.
Since Litecoin price broke out of the flag on September 16, it has dropped nearly 7% and is currently hovering at $52. Going forward, investors need to pay close attention to market influencer Bitcoin’s price for clues as to what might happen to LTC, which is also looking ready for a quick correction.
Although the bear flag forecasts a 64% crash, a nosedive of this extent is unlikely to happen without Bitcoin falling equally hard. Hence, as things stand, investors should prepare for a more moderate 20% crash to $41.66 instead.
LTC/USDT 1-day chart
While things are looking bearish for Litecoin price, this could change if Bitcoin price triggers a premature run-up. In such a case, if LTC produces a daily candlestick close above $64.43, it will invalidate the bearish thesis.
This development from Litecoin price could see it climb higher and a retest of the range high at $74.47.
The video attached below talks about Bitcoin price and its potential outlook, however, this is still relevant as it is likely to influence Litecoin price.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.